ABTC

American Bitcoin ($ABTC) Director Buys Dip After -85% Crash...Major Shareholder Sold $20M Three Months Prior

12/23/2025 21:42

American Bitcoin ($ABTC) presents a stark contradiction. On December 16, director Richard Busch purchased 175,000 shares for $290,500 ($1.66 per share), buying near the bottom after an 85% crash from peak. Yet just three months earlier on September 3, major shareholder Anchorage Lending sold 2.53 million shares for $20.2 million ($7.97 per share) on the same day as the NASDAQ debut and 5-for-1 reverse stock split. American Bitcoin, which went public on NASDAQ in September 2025, operates a hybrid Bitcoin mining and treasury model. Formerly Gryphon Digital Mining, the Miami-based company gained attention with Eric Trump as co-founder and Chief Strategy Officer. The company mines Bitcoin directly while simultaneously accumulating it as a treasury strategy. With 25 exahash of mining capacity, mining costs run approximately 50% of market purchase prices. Competitors include Hut 8 ($HUT), Bitfarms ($BITF), CleanSpark ($CLSK), and Riot Platforms ($RIOT). Investors' primary question: Why did the stock crash despite strong results? Q3 revenue (ended September 30) doubled to $64.2 million quarter-over-quarter. Gross margin expanded 7 percentage points to 56%, and adjusted EBITDA nearly doubled to $27.7 million. Bitcoin holdings surged to 3,418 coins since the April IPO, reaching approximately 5,098 by December 16—entering the top 20 public companies. With a P/E of 10.54x and ROE of 28.9%, valuation appears attractive. The issue is growth deceleration. Management guided FY2025 revenue to $76.9 million and FY2026 to $79.59 million—just 3.5% growth. This contrasts sharply with Q3's sequential doubling. Markets interpret this as momentum exhaustion. The stock plunged from November's peak of $34.91 to around $22 on December 17. After surging 12x from August's $2.85 low, it's down 35%. One-month returns: -58%; three-month: -73.2%. Director Busch's purchase merits attention in this context. While $290,500 is modest, a director buying at the bottom is meaningful. Classified as consecutive trading, it may represent planned accumulation. Conversely, Anchorage Lending's $20.2 million September sale appears linked to corporate restructuring. Wholly owned by Anchor Labs, Anchorage Lending cashed out immediately post-NASDAQ listing when shares traded in the $6.89-$7.85 range. Investment criteria are clear. First, Bitcoin price is critical. Company revenue and Bitcoin asset value directly correlate to Bitcoin prices. If Bitcoin sustains momentum above $100,000, that's positive. Second, mining competition intensification matters. Rivals are expanding capacity, threatening margins. Third, regulatory environment. Favorable US crypto regulation would significantly benefit the company. Fourth, guidance achievement. Missing $80 million FY2026 revenue would severely damage credibility. Risk signals are evident. Bitcoin price crashes simultaneously hit revenue and asset values. Rising mining difficulty and competition could erode profitability. Sustained growth deceleration would expand valuation discounts. The major shareholder's post-listing selloff remains concerning. Bull scenario: Bitcoin rises above $150,000. Surging Bitcoin holdings value combined with mining profitability improvement could trigger stock recovery. The 50% cost advantage versus market prices provides competitive edge. Further Bitcoin accumulation entering top 10 rankings could attract institutional interest. Base scenario: Bitcoin ranges between $80,000-$120,000. Stock likely trades sideways at current levels. Guidance achievement becomes the determining factor. Bear scenario: Bitcoin crashes below $60,000. Declining asset values plus mining profitability erosion could drive new lows. Intensifying competition pressures margins while growth deceleration accelerates. Near-term outlook (1-6 months) depends on Bitcoin price trajectory. Q4 results (expected February-March 2026) represent the next major catalyst. Guidance upgrades could spark recovery. However, while technical rebounds are possible after the recent crash, upside remains limited unless growth concerns dissipate. Long-term outlook (6+ months) hinges on Bitcoin's secular uptrend and the company's cost competitiveness. Maintaining 50% cost advantages while expanding Bitcoin holdings offers long-term value. But if growth deceleration proves structural, valuation reassessment is inevitable. Regulatory improvements and institutional inflows are prerequisites for long-term appreciation. In conclusion, American Bitcoin's strong financial performance contrasts sharply with the stock crash driven by growth deceleration concerns and Bitcoin volatility. The director's bottom-fishing purchase signals confidence, but September's major selloff and conservative guidance weigh heavily. While 10.5x P/E appears attractive, structural risks from Bitcoin price dependency and mining competition loom large. If the Bitcoin bull market continues, recovery is possible, but confirmed growth deceleration could create a value trap. For long-term Bitcoin believers, the mining cost advantage and accumulation strategy hold appeal, but only for investors who can tolerate extreme volatility. Position reduction or sidelines appears the prudent choice for now.